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Construction begins at 200 Greene Street in Jersey City which will house 763 residents in 69 stories, which received a tax abatement courtesy of the City Council in April. Mayor Steve Fulop's plan will revamp the way the city awards the long-term tax breaks to developers.
(ASHLEE ESPINAL JOURNAL PHOTO)
Jersey City yesterday unveiled Mayor Steve Fulop’s plan to revise the city’s policy on long-term tax breaks, a plan Fulop says will encourage development in areas of the city that have been left out of the Downtown construction boom.
The plan, which Fulop called a top priority when he was running for mayor this spring, creates a six-tier system that provides more benefits to developers seeking to build in Journal Square, Bergen-Lafayette and Greenville and fewer perks for those building along the waterfront.
The new policy, set to be implemented via executive order, would allow for 30-year tax breaks, known as tax abatements, for developers building in Journal Square; 20-year breaks for projects in the inner city, Greenville and parts of the West Side; and 10-year abatements for developers building in parts of the West Side, the Heights and the southeastern waterfront.
Downtown developments, meanwhile, which have been showered with long-term tax breaks in the past, will be permitted abatements stretching only for five years. Fulop has argued that the value of Downtown land is so high that there’s no need to use long-term abatements to lure developers to build there.
“Until now, all the market-rate development has been limited to Downtown because of a lack of a policy,” Fulop said in a statement from the city. “These one-off deals have created a culture of artificial competition with parts of the city, abatements based on who you know, and no foresight for future development in those parts of the city where it is needed most.”
Fulop’s plan also requires developers who receive abatements to hire local labor and minorities and contribute to the city Affordable Housing Trust Fund.
There are tier-specific requirements, too. Developers building in certain areas of “Tier 2” (Bergen-Lafayette, Greenville) must either build a daycare center/pre-K, commit 35 percent of the project’s construction jobs to city residents or give the city 1.5 percent of gross construction costs to pay for recreational programs, educational facilities or jobs for city teens.
Phone calls seeking comment from James McCann and Charles Harrington, two attorneys who frequently represent developers seeking abatements, were not returned.
There are 151 tax-abated properties in Jersey City. City spokeswoman Jennifer Morrill said she couldn’t attach a value to them, but she noted that in the $516 million 2013 budget, $109 million in revenue comes from payments in lieu of taxes, which often (but not always) come from tax-abated lots.
When he represented Ward E on the City Council, Fulop often vilified the city’s tax-abatement process, accusing the prior administration of handing them out as political favors. Former Mayor Jerramiah Healy, who lost the May 14 mayoral contest to Fulop, told The Jersey Journal prior to that election that without tax abatements the so-called Gold Coast would have remained undeveloped.
“You still need incentives, even on the waterfront,” Healy said then. “Those incentives cause investment, they cause development.”
Eugene Paolino, an attorney who represents developers and has often clashed with the city over tax abatements in the past, said he is "paying very close attention" to Fulop's new policy.
Paolino said he thinks the plan is aimed at clarity and achieves defined and specific results.
"I expect that over time what works will be refined and what doesn't work the mayor will jettison," said Paolino, who works for Newark law firm